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Will the state take all my money if I pass away without a will?

In most situations, this is nothing more than a myth. If one dies without a will, your assets (including your money) will be distributed to your legal or biological next-of-kin surviving you under the Intestate Succession Act (the “Act”). Under the Act, the following persons may be entitled to share in the distribution, under the rules prescribed therein:

  • Spouse
  • Legal or biological child
  • Parent
  • Brother/sister (or if deceased, their children)
  • Grandparent
  • Uncle/aunt

Only rarely, in cases where there is no will and no distribution is possible as there is no next-of-kin as set out above, will the deceased person’s assets be distributed to the state.

Separately, we specify “legal or biological next-of-kin” because, under the Act, only biological or legally adopted children are entitled to claim against their natural parent’s estate. A “child” as defined under the Act does not include step-children, nor does it include persons who are not legally adopted.

In this regard, if you have step-children or children who you have long treated as your own (but did not legally adopt) and you wish your assets to pass to them on your death, we strongly advise that you create a will to provide as such. The law will not otherwise recognise their entitlement to your estate, no matter how the evidence may point to the presence of a paternal/maternal bond between you and them.

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Making A Lasting Power of Attorney – Appointing someone to make your decisions

A lasting power of attorney (or the “LPA”) is a document which allows an adult (i.e. someone who is at least 21 years of age) to voluntarily appoint another person (or persons) to make decisions on his behalf in matters of, among other things, personal welfare and/or property and affairs, in the event he or she loses his or her mental capacity.

While loss of mental capacity is often linked to age-related issues such as dementia, people of virtually any age can lose their mental capacity due to neurological diseases or accidents. Mental capacity may however only be assessed on a case-by-case basis and cannot be assumed based on a medical condition alone.

As in the case in wills, drawing up a lasting power of attorney is often thought about as one advances in years. As with most things, there is no hard and fast age at which one should consider these matters. We would therefore recommend that every person of age make an LPA as early as possible, while one is still mentally alert, lest a tragedy strikes and it becomes too late after one becomes mentally unsound.

Again, much like wills, the decision to sign an LPA is often not just for the benefit of oneself (i.e. since one can choose a trusted friend or advisor to make one’s decisions if the time comes), but to prevent one’s loved ones from being faced with the stress and difficulties that come with applying for a deputyship order if one loses mental capacity without an LPA in place.

Quite recently, the process involved in preparing an LPA has been greatly streamlined and simplified. You can now access an e-service portal (https://eservice-msf.msf.gov.sg/) which allows you to, among other things, prepare your LPA application and update your particulars online.

Please contact us if you need any assistance in preparing or certifying your LPA. We will be happy to guide you through the process.

For Singaporeans: Notwithstanding that the Great Singapore Sale has passed, there is currently an LPA application fee waiver in place until 31 August 2018 for the making of an LPA Form 1!
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How valid is a handwritten will?

Handwritten wills.

With the widespread reliance on computers, this issue does not often arise in present times, but there may be instances when you feel that handwriting a will is the best way to keep it a secret and to avoid detection from greedy relatives who may otherwise insist on being kept apprised of the situation (or potentially even hack your computer to get access).
But would that handwritten will be valid?

Sometimes referred to as a “holographic will”, such handwritten wills are treated differently in different jurisdictions. In Singapore, for a handwritten will to be valid, the formal requirements of a will should still be met, i.e. rules as to formal validity. This includes the following: The will must be (a) signed by the person creating the will (also known as the testator); (b) (the signature must be) at the end of the will; and (c) the testator’s signing of the will must be witnessed by at least two people. We should mention for good order that these witnesses should not be beneficiaries of the will or spouses of the beneficiaries of the will as the gifts to those beneficiaries may then not be valid.

Quite apart from the formal validity of the will, a real practical issue that handwritten wills have is interpretation. In our view, the risk of handwritten wills being unenforceable is often not because of issues of invalidity, but more because the wills are illegible and the testator’s intentions not abundantly clear. In such instances, your intended gifts may be erroneously made to another person, especially in cases where there is room for ambiguity (e.g. where your children’s names differ by only one letter such as an ‘a’ and ‘o’ or an ‘i’ and ‘l’).

In conclusion, while we would caution against handwritten wills for reasons of clarity, there is no legal impediment (save for formal validity requirements) against hand-writing your will.

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Sham Marriage: does that revoke one’s CPF nomination?

Weddings are synonymously considered with marriage, and most couples (if not all) take great pains to plan for the wedding itself. Flowers, caterers, photographers. Every minor wrinkle must be ironed out before the big day. What is often overlooked, however (and quite understandably), is the implications of the marriage on one’s assets after death.

In this context, in relation to one’s estate, a marriage typically results in the automatic revocation of one’s will and CPF nomination. Pursuant to section 25(5) of the Central Provident Fund Act (Cap. 36), any nomination made shall be revoked by marriage. Similarly, under section 13 of the Wills Act (Cap. 352), a will will be automatically revoked by the marriage. There is an exception, however, in respect of the revocation of wills – if the will is expressed to be in contemplation of marriage, it will not be automatically revoked.

In this regard, if you foresee that marriage is a possibility for you in the future, then we offer our congratulations in advance, but caution that care must be taken in drafting your will.

Sham or void marriages?

Jackie Kennedy once said, “The first time you marry for love, the second for money, and the third for companionship.” As rightly alluded to, people marry for a myriad of reasons. There are even occasions where a marriage is entered into for reasons of convenience, i.e. to help the “spouse” to obtain a work permit. While some have said that there lies some truth in Jackie’s words, the situation sometimes reveals that the “marriages” are sham marriages and in those instances, questions are raised in respect of the distribution of the deceased’s “spouse” assets.

In the case of Soon Ah See v Diao Yanmei [2016] (“SAS v DY”), the High Court considered whether the marriage between Ms. Diao and Mr. Soon (deceased) was a “sham” marriage, and if so, whether the “sham” marriage would necessarily result in the automatic revocation of the deceased’s prior CPF nomination. By way of background, SAS v DY was a case of two sisters who sought to prevent their deceased brother’s wife from obtaining a share of his CPF monies, on the grounds that their marriage was one of convenience to help the woman, a Chinese national, obtain a work permit. The issue of CPF nomination arose because prior to his marriage, the deceased, Mr. Soon, made a CPF nomination in favour of his two sisters in equal shares. Mr. Soon then married Ms. Diao, but his purported marriage was not announced to anybody in his family, and was only discovered after Mr. Soon’s passing when Mr. Soon’s sisters visited the CPF board in relation to the former nomination. In light of the marriage, the CPF nomination was automatically revoked, and Mr. Soon’s sisters therefore commenced the action against Ms. Diao. In relation to the first issue, the Court held that the marriage was a sham marriage but was not therefore void per se. Notwithstanding the validity of the marriage, the Court then went on to hold that the deceased’s prior CPF nomination was not automatically revoked.

While the amendments to the Women’s Charter which took effect from 1 October 2016 supersedes the High Court’s ruling on the first question (since sham marriages are now legislatively construed as being void), attention should still be given to the ruling on the second issue, that a sham marriage does not result in the automatic revocation of a person’s CPF nomination.

While no mention was made about wills in SAS v DY, in our opinion the same principles should apply to a formerly executed will. If a subsequent marriage is deemed void, the will should not be revoked as a result of the marriage.

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Central Provident Fund (CPF) monies, monies nonetheless

When one thinks of one’s assets – one’s CPF savings are quite often overlooked. No doubt this may be partially because one’s CPF savings, like money in a piggy bank, are not the lowest hanging fruit on a tree. It should however be remembered when one is writing one’s will, as the bequest of all your assets in a will, unfortunately, does not include one’s CPF savings.

If you want your CPF savings to be distributed according to your wishes, you should make a CPF nomination by way of the form provided in the CPF website. You may specify who is to receive your CPF savings, and in what proportion each nominee should receive, upon your demise. Such distributions may be made in cash via cheque or GIRO, in their CPF accounts, or by monthly payments (if made to children with special needs).

We should mention however that the CPF board does not permit nominations to be made by category (e.g. to “all my children in equal proportions”). Therefore, you must also remember to update the CPF nomination where there are changes in circumstances (e.g. marriage, child birth, or death).

If no nomination is made, your CPF savings will be transferred to the Public Trustee’s Office on your demise, for distribution to your family members under the Intestate Succession Act (Cap 146) (the “Act”) if you are not Muslim, or under the Inheritance Certificate if you are Muslim. For example, under the Act, if an intestate dies leaving a surviving spouse and issue, the spouse shall be entitled to one-half of the estate. We should also mention that a fee will be charged for such distribution.

While you may agonise over how your CPF savings may only be used in certain circumstances, remembering that you have assets in the form of CPF savings (and making the due nominations) will allow you to provide more for your loved ones in the event of your demise, in the way you wish.

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Debts – Death will not part us

Debt and death may seem to bear some (albeit sinister) familiarity or harmony. But this is not one of those “till death do us part” situations.

Should the deceased have personal debts which have not been settled (before he kicked the bucket), the deceased’s estate will still be liable for such debts. Thus the debts do not pass to the deceased’s beneficiaries. The creditor may only make a claim for the debt against the estate; there is no claim against anyone else.  The only exception is when someone is jointly liable (with the deceased) for the debt, e.g. if a mortgage / loan was taken out jointly with e.g., a spouse. If the debt is owed jointly, then the surviving debtor will bear the full burden of paying it off.

Generally, creditors (e.g. banks if credit card bills are owed) will not write off the deceased’s debt unless his estate is worth less than the outstanding debt. If the debt is so small that the cost of recovery is greater than the debt, there is also a possibility that small debts will be written off. This of course will be on a case-to-case basis.

Although the beneficiaries under a will or the intestacy rules do not technically inherit the deceased’s debts, the end result is not very different in practice because the estate cannot be distributed until all the debts are paid.  In the case of a properly drafted will with a gift of residue (so that the entire estate is disposed of in the will) the residuary estate will be utilised first to satisfy the debts.  If that is not sufficient, the law lays down the order in which other portions of the estate may be utilised. If the deceased’s estate is insolvent, then the deceased’s funeral, testamentary and administration expenses will have priority.

There is arguably some tranquillity in death, but such unfortunately does not apply in relation to the deceased’s debts.

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I have property overseas, can I still make a will in my home country?

What happens to my foreign real property/land when I die? Some may say this is a first world problem, and it is hard to fault them. As real estate is typically governed by the law of the land, there may be conflicts of laws issues arising if, for instance, your will is governed by Singapore law while your property is located elsewhere.

Each jurisdiction has its own specific rules for dealing with real property (land) and how it is to be dealt with upon the passing of its owner. For example, Singapore’s Residential Property Act (the “Act”) is designed to restrict or at least control the extent to which foreign persons can own “residential property” (defined to mean, essentially, landed property and not, for example, condominiums). Under the Act, no residential property can be owned by or held on trust for a foreign person without getting appropriate permission from the authorities (this process has been facilitated in the case of residential property located in Sentosa, an island resort in Singapore).

If the owner of residential property passes away, leaving that property to a foreign person in his or her will, that foreign person is effectively prohibited by the Act from inheriting the property. Instead, the deceased person’s personal representative(s) must take steps to sell the property to a Singapore citizen or persons approved by the authorities within 10 years; the proceeds of sale will be passed to the foreign person designated in the will.

Who would have thought that owning property/land overseas would be such a hassle after death?

What can you do? First and foremost, before you make a will, you must remember to list out all your overseas assets carefully and inform your lawyer. Otherwise, notwithstanding that there is often a “catch-all” clause at the end providing for the rest of your assets, your foreign property may be ignored, mismanaged and squandered.

Additionally, depending on whether that foreign jurisdiction will recognise the Singapore will or whether the foreign jurisdiction permits the writing of two wills, you may wish to consider making two (or more) wills, each specific to where your assets are located. However, extreme care must be taken to ensure that the wills do not contradict (or worse, revoke) each other.

Unfortunately, there is no easy and fast rule on managing your overseas real estate nor is there a simple answer to whether a particular foreign jurisdiction will accept a Singapore will. Much will depend on which jurisdiction is applicable In this case, you may wish to appoint a foreign counsel to help you wade through these complicated waters.

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Planning for your stepchildren

5 common mistakes when writing a will

When a non-Muslim person passes on without leaving behind a valid will….

When a non-Muslim person passes on without leaving behind a valid will (or if the will cannot be located), that person is said to have died intestate and the distribution of that person’s estate is governed by provisions of the Intestate Succession Act (the “ISA”). The default rules under the ISA, however, often do not reflect the true intentions of the deceased person, particularly where the deceased had stepchildren to whom he or she wanted to leave his or her inheritance.

Let’s look at the case of Low Guang Hong David and others v Suryono Wino Goei….

This issue was explored in the case of Low Guang Hong David and others v Suryono Wino Goei [2012] 3 SLR 185 (“Low Guang Hong”). In Low Guang Hong, the plaintiffs were one Mr Low (deceased)’s children from his first marriage, and Mdm Lina (deceased)’s stepchildren. Mdm Lina was Mr Low’s second wife, and Mr Low and Mdm Lina had no children between them. Mr Low’s estate was bequeathed to Mdm Lina upon his death.

By way of further background, it was said that the plaintiffs were treated by Mdm Lina as if they were her own children, while an unsigned will apparently leaving Mdm Lina’s estate to the plaintiffs was found in her safe deposit box with a bank after her demise, no evidence was adduced as to how the unsigned will came about.

In Low Guang Hong, the plaintiffs sought a declaration that “child” under the ISA was to be interpreted to include a stepchild. In this way, the plaintiffs would be deemed to be Mdm Lina’s “children” under the ISA and they would then be entitled to Mdm Lina’s estate to the exclusion of her only brother, the defendant in the action.

Under section 3 of the ISA:

“child” means a legitimate child and includes any child adopted by virtue of an order of court under any written law for the time being in force in Singapore, Malaysia or Brunei Darussalam

However, after analysing the ISA and certain other statutes, including the Women’s Charter and the Maintenance of Parents Act, the Court refused the declaration sought by the plaintiffs. Detailed reasons for the Court’s decision are set out in the learned judge’s decision, but what we wish to highlight is this issue arising from not having a valid will, i.e. that the failure of intestacy rules to achieve the outcome that the deceased might have desired.

Since these default rules apply in all (non-Muslim) cases of intestacy, more likely than not, this one-size-fits-all approach results in a distribution that is unlikely to be what the deceased would have desired.

If it was true that the unsigned will was prepared by Mdm Lina (but it was ultimately not properly executed due to some unfortunate reason), it would have meant that Mdm Lina intended to bequeath her assets to her stepchildren on her death, and the rules of intestacy would not have achieved that goal for her.

 

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5 common mistakes when writing a will

5 common mistakes when writing a will

A will is your most important estate planning tool and one of the most critical documents you will prepare.

Erring on the side of caution would be prudent as a small mistake can have severe repercussions on your loved ones, crucially since you will not be around to rectify those mistakes. We have listed below 5 common mistakes to avoid when drafting your will, especially when you have decided to do so without professional help:-

1. Forgetting to update your will when your circumstances change

Under the law, marriage will revoke any will written prior to it, with a few rare exceptions.

A divorce, on the other hand, does not revoke an existing will, so it is important that you update/change your will accordingly to reflect your new circumstances, especially where you have given some part of your estate to your ex-spouse.

The birth of a child is also another situation which renders a review of your will necessary.

2. Omitting a residuary clause

A residuary clause is a catch-all clause that dictates how assets which are not accounted for are to be distributed. This is particularly useful in the event you are not distributing the entirety of your assets by way of specified percentages. A residuary clause covers the rest of your property that is not specifically mentioned in your will, such as those assets you have acquired after the making of the will. Without such a clause, you risk having property that is not covered by the will distributed by the rules of intestacy instead of according to your wishes.

3. Certain assets cannot be distributed through your will

CPF money does not form part of the estate and cannot be distributed by your will. In order to ensure that your CPF savings is distributed in accordance to your wishes, you need to make a separate CPF nomination under the CPF Act.

Property owned by you with another person under a joint tenancy will automatically devolve on the survivor regardless of anything stated in your will; although you can make provisions in the will contemplating the situation whereby your co-owner dies before you, rendering you the sole owner of the property, in which case you will be free to leave it to any person of your choice.

4. Not having 2 witnesses to your will

You need to have 2 witnesses at the signing of your will. Please note that the 2 witnesses must not be beneficiaries in your will, otherwise they risk losing their entitlements under the will. This legal requirement prevents any potential conflict of interests.

5. Failing to consider guardianship of children

You are able to name the guardian who will raise your children (under 21 years of age) in the event of your death in your will. You should choose any guardian carefully and make sure that they are willing to act. Where both parents of the child are still alive, they will typically have to come to an agreement about who is to be the guardian of the child. The guardian is not necessarily the executor, who is tasked with looking after your estate. Guardians and executors have distinctly different roles.
Should you have any questions about the drafting of wills, we will be happy to assist you.

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How is a will dealt with after a death?

Before any petition for a grant of probate is filed, it is imperative that proper inquiries be made as to whether a deceased person left a will.

Once it has been ascertained that the deceased person left a will, the executor can apply for a grant of probate.

What is a Grant of Probate?

A petition for a grant of probate is filed in the name of the executor where is a valid will and where an executor is duly named in the will. In furtherance of his duties, an executor has to furnish the relevant documents, which includes a certified copy of the specific will, to the courts to apply for a Grant of Probate. A Grant of Probate is a court order which gives the executors authorization to administer the estate of the deceased in accordance with his / her will.
Probate matters in the State Courts vs High Court
If the total value of the estate of the deceased person is below S$3 million, the application is made to the State Courts. If the total value of the estate of the deceased person exceeds S$3 million, the application has to be made to the High Court. Where the estate has less than S$50,000 in value, one can apply for the Public Trustee’s Office to act.

Documents required

Typically, it is advisable for the layman to engage a lawyer to manage the application process in view of the relatively complex set of documents required for the probate application.

The documentation required include but is not limited to:-

  1. Ex parte Originating Summons commencing an action in court in the name of the executor. Searches of both the record of caveats and record of probate applications will have to conducted on the day of the probate application. A probate caveat is a caution against the estate to prevent dealings in the estate without the knowledge of the person who files the caveat, typically in a situation where that person intends to challenge the validity of the will. A digital copy of the search report has to be attached to the Originating Summons;
  2. Statement in Form 51 of the Family Justice Court Practice Directions providing certain information in relation to the deceased, his Estate and the applicant(s);
  3. A certified true copy of the Death Certificate;
  4. A certified true copy of the will;
  5. The Administration Oath – the executor who is applying for the right to administer the estate has to give an undertaking to the Court that he/she will distribute the estate and effects of the deceased according to the will’s stipulations and to account for the same;
  6. Supporting Affidavit – The applicant’s Supporting Affidavit has to be filed within a given deadline (usually within two to three weeks from the filing of the Administration Oath); and
  7. Schedule of Assets – the Schedule of Assets has to be filed and exhibited in the Supporting Affidavit. This is essentially a list setting out the deceased’s properties in Singapore as at the date of death and his / her outstanding debts.

Once the above documents are filed, they will be examined. If everything is proper and in order, the Application for the Grant of Probate will be granted and the Grant of Probate can be duly extracted.
Should you require help with the execution of a will after a loved one has passed away, please feel free to contact us.